Human_Resources_Management

HRM is an essential and vital function for organizational success.While HRM focuses on the potential and actual productive value of HR to an organizations’ success, strategic HRM takes a more long term focus by emphasizing the need of HR plans and strategies of overall organization. The emphasis of strategic HRM is on strategic integration which is matching HRM strategies to business strategies. In this paper, we will discuss two models of Strategic HRM: The matching model and the resource-based model. Comparing these models, while listing their similarities and differences, will help us understand Strategic HRM on a better level. In the second part of this paper, I will address which features of the Resource-based view my current workplace: the Treasury Board Secretariat (Federal Government) uses and how it relates to Human Resources Management. Matching model First off, the matching model also known as “best fit”, requires that an organizations’ HRM policies and practices be configured and managed in a way that is congruent with the particular strategy. This model concentrates on fit between an external strategy and internal strategy. HRM strategies are all about making business strategies work and so emphasis is placed on how to best match and develop appropriate systems. This model concentrates on the following issues to address success: • Selection (Most suitable people for the business needs) • Performance (In the business’s objectives) • Appraisal (Feedback on an organizations’ success) • Awards (For good performance and/or practice) • Development (Of the skills and knowledge of people in the organization) The matching model also states that differing views cannot exist as everyone should be working toward achieving the same goal-success of the business. This model has however, attracted a lot of criticism. At a conceptual level, it is seen to depend on a rational, mechanical form of organizational decision-making. In reality, strategies are often determined on a more intuitive, political and subjective level. Certainly, the decision-making is more complex than the model allows. It is also both prescriptive and normative, implying that the fit to business strategy should determine HR strategy. There are many similarities with the resource-based model but the matching model has a harder, less humanistic edge, holding that employees are resources in the same way as any other business resource. People have to be managed in a similar manner to equipment and raw materials. That must be obtained as cheaply as possible, used sparingly, and developed and exploited as much as possible. Resource-based model The resource based view also known as the soft approach, is the variety of different resources that makes each organization unique which leads to differences in competitive performance across an industry. This model appears to mean different things to different authors as this view is very broad. The RBV states that "companies can sustain competitive advantage by implementing strategies that exploit their internal strengths, through responding to environmental opportunities, while neutralizing external threats and avoiding internal weaknesses" (Marchington and Wilkinson 2002). According to Boxall and Purcell: Looking at internal sources of viability and advantage, emphasis is placed on resources which are critical to organizational success yet are rare, or not commonly available, are not substitutable and are combined together to form organizational capabilities or processes which are imperfectly imitable, or hard for others to copy; namely value, rarity and a lack of substitutes (Boxall and Purcell, 2003) It is the combination of these resources that will allow companies to gain sustained competitive advantage. The Resource-based view focuses on how firms can become competitive through differentiation, some firms which are too different from the rest of the industry face challenges since they do not necessarily represent what customers want. An attractive organization and one that will represent customer wants, is one that is different from other firms' niches yet similar enough to be rational and understandable. (Marchington and Wilkinson 2002). Differences/similarities between both models The matching model focuses on the company's external competitive environment. This model does not attempt to look inside the company. In contrast, the resource-based perspective highlights the need for a fit between the external market context in which a company operates and its internal capabilities. The resource-based view also differs from the matching model in that it is company focused, rather than environment focused. The incorporation of both soft and hard elements within one theory or model is highly problematic because each rests on a different set of assumptions in the two key areas of human nature and managerial control strategies. According to Schuler and Jackson: According to the Resource-based view, competitive advantage can only occur in situations of firm resource heterogeneity and ‘firm resource immobility'. It is these assumptions that make the RBV different from the traditional strategic management model. Firm resource heterogeneity refers to the resources of a firm and how different these resources are across the firms. In the matching model, firm resources are viewed as homogeneous across firms and are considered mobile where firms can purchase or create resources held by a competing firm (Schuler and Jackson 1999). Therefore, given resource heterogeneity and resource immobility a firm's resource can undoubtedly be the source of sustained competitive advantage. These two perspectives on human resource management are viewed as opposing: what is striking is that the same term HRM is thus capable of signaling diametrically opposite sets of assumptions (Storey 1991). Although hard and soft models of human resource management therefore are derived from very different intellectual traditions, and incorporate diametrically opposed assumptions about human nature and managerial control, both have been incorporated within the same theories or models of human resource management. Resouce-based model & HR: Large organizations such as the Federal government use the resource-based model as an organization guiding principle as it stresses the importance of employee commitment, self-regulation and a broad degree of self- control. The focus in this model is on individual development, lifetime training and individual freedom and permits the organization to learn faster and apply its learning more effectively. Betcherman et al. (1994) reported that the large majority of firms do not take a systemic approach to training; roughly 20 per cent appear to have a training budget and about 15 per cent have a formal training plan. This is the case for my sector, the Treasury Board Secretariat. Every year HR allocates a specific amount of money that will go to employee training which will develop their skills and will make them feel valuable to the organization. The federal government offers employees the opportunity to develop their talent which is a perfect example of a resource-based view. I can say that in my own experiences this is a big factor in employee retention as it gives them a sense of belonging and encouragement for further learning opportunities. In addition, the human resources flow is also a key factor in employee retention in the government. These factors can take such forms as promotions, exits, job security, career development, advancement and fair treatment. This is highly implemented in the government as they keep watch over corporate regulation and its fulfillment, carrying out audits and creating incentives for ethical behavior. High-commitment HR practices will affect the individual performance of employees by influencing their capacities and motivations. This is why HR is valuable for any organization such as the Federal Government. Due to the intense focus on internal resources, the Resource-based view is creating new avenues for strategic HRM researchers to explore ways that firms develop human resources advantage. According to Schuler and Jackson: In light of resource-based thinking, strategic HRM can be valued for its role in generating strategic capability, for its potential to create firms which are more intelligent and flexible than their competitors over the long haul, and for firms which exhibit superior levels of co-ordination and cooperation (Schuler and Jackson 1999). In turn, lower staff turnover and higher productivity should improve corporate financial results as well as organizational results. The Resource-based view in the government also relies on reward systems which are gained with achievement and challenge, pay, bonuses, pensions, holidays, health insurance and flexible working hours. As an employee of the Federal Government, I would have to say that there is no better place to work when it comes to those advantages. These results suggest that organizations that wish to improve their relationship with their employees will have to give employees the importance and value they deserve and promote high-commitment HR practices that enhance employees’ internal development. Finally, proper HR implementation in an organization results in individual well being and organizational effectiveness as well as desirable organizational outcomes such as high job performance, stronger problem solving skills, greater change consistent with strategic goals and improved cost-effectiveness. Taking HR seriously implies a greater commitment to employees. The adoption of high-commitment systems can be seen as a management initiative aiming to increase organizational performance through employee involvement. High-commitment systems have become a key element in the increasingly leading discussions of HRM. As a result, we can say that the federal government uses mostly a resource-based view because it tends to concentrate on people’s outcomes rather than organizational outcomes and business performance. To conclude, HRM effectiveness can be achieved through both the matching model and the resource-based model since this effectiveness is related to both organizational strategy and objectives (matching model) and employee motivation and development (resource-based model). Listing their similarities and differences, helped us understand Strategic HRM on a better level and addressed which features of the Resource-based view the Federal Government uses and how it relates to Human Resources management. The objective to any successful organization is making sure to set a right & achievable direction to lead people and companies to reach best performance weather using the proper model for the organization in question. References: Boxall, Peter and Purcell, John. Strategy and Human Resource Management. Palgrave Macmillan. 2003. Marchington, Mick and Wilkinson, Adrian. People Management and Development: Human Resource Management at Work. CIPD Enterprises Ltd. 2002. Schuler, Randall S. and Jackson, Susan E. Strategic Human Resource Management. Blackwell Publishers Ltd. 1999. Storey, John. Human Resources Management Nelson Education, 2001. Betcherman G., McMullen K., Leckie N., Caron C. The Canadian workplace in transition 1994. Cappelli, Peter and Singh, Harbir. Intergrated strategic Human Resources and strategic management. 1992.